The addition of the Hard Rock casino and Ocean Resort casino in Atlantic City—both of which opened in late June—seems to have contributed to a 15.3 percent dip in profits for the city’s now nine casinos in the quarter covering July, August and September.
Of the seven casinos operating before the new casinos opened, five saw profit declines. Only the Golden Nugget casino and Bally’s Atlantic City saw increases according to figures released by the New Jersey Division of Gaming Enforcement. Still, all nine casinos did report profits.
In their first quarter of operation, Hard Rock made an $8.2 million profit while Ocean Resort had $1.4 million in profits according to an analysis by the Associated Press. The Golden Nugget saw its gross operating profit increase by 6.6 percent to $13.6 million while Bally’s rose only half of one percent to $18.3 million.
“Industry profits were down in light of the new competition that entered the market,” said James Plousis, chairman of the New Jersey Casino Control Commission in a press release. “On a positive note, compared to last year, over 6,300 more people were working in the industry and there were nearly 5,400 more full-time jobs.”
The report does indicate that consumers increased spending at the city’s casinos and net revenue increased nearly 18 percent over the same quarter last year. But with two new casinos in the market and increased spending by all properties, profits still declined.
According to the AP, the Tropicana saw the biggest drop in profit at $31.8 million, down more than 31 percent from the same period last year. The Borgata was down nearly 22 percent to $63.1 million, and Resorts was down 14.7 percent to $9.1 million. Harrah’s was down 5.6 percent to $35.9 million and Caesars was down 2.5 percent to $28.6 million.
Among internet-only entitles, Resorts Digital was down 83.3 percent to $2 million, and Caesars Interactive NJ was down 69.4 percent to $1.1 million.
Gross operating profit reflects earnings before interest, taxes, depreciation, and other charges, and is a widely-accepted measure of profitability in the Atlantic City casino industry.
